Justia Civil Procedure Opinion Summaries

In 2011, Deutsche Bank filed a breach-of-contract action against Walter M. Potenza and Carmela Natale, alleging default on a promissory note and loan modification agreement. Deutsche Bank obtained a judgment for $1,662,837.12 in 2017. In 2021, the plaintiffs filed an independent action in equity, claiming Deutsche Bank committed fraud on the court by falsely asserting it was the holder of the note, despite knowing the note had not been properly endorsed.The Superior Court granted Deutsche Bank's motion for judgment on the pleadings, finding no credible evidence of fraud and determining that the plaintiffs' failure to obtain the deposition earlier was due to their attorneys' negligence. The plaintiffs appealed this decision.The Rhode Island Supreme Court reviewed the case and affirmed the Superior Court's decision. The Court held that the plaintiffs could not establish all the elements required for relief under Rule 60(b). Specifically, the plaintiffs admitted Deutsche Bank was the holder of the note in their 2011 answer and did not present evidence or seek a continuance during the 2017 summary judgment hearing. The Court concluded that the plaintiffs' failure to challenge the validity of the note or the knowledge of Deutsche Bank's affiant precluded them from obtaining relief. The judgment in favor of Deutsche Bank was affirmed, and the case was remanded to the Superior Court. View "Potenza v. Deutsche Bank National Trust Company" on Justia Law

A qui tam relator, Sedona Partners LLC, alleged that several transportation service providers (TSPs) engaged in a fraudulent scheme to defraud a U.S. government shipping program. The TSPs were accused of submitting low-ball bids to win contracts and then falsely certifying the need for foreign flag vessel waivers, despite knowing that U.S. flag vessels were available. This allowed them to use cheaper foreign vessels, thereby increasing their profits while undercutting competitors who submitted legitimate bids.The United States District Court for the Southern District of Florida initially dismissed Sedona's first amended complaint without prejudice, citing a lack of specificity in the allegations. Sedona then filed a second amended complaint, which included new allegations based on information obtained during discovery. The defendants moved to dismiss this complaint and to strike the new allegations, arguing that they were derived from discovery and thus circumvented the heightened pleading requirements of Federal Rule of Civil Procedure 9(b). The district court agreed, struck the discovery-based allegations, and dismissed the second amended complaint with prejudice, concluding that without these allegations, Sedona failed to meet Rule 9(b)'s particularity requirement.The United States Court of Appeals for the Eleventh Circuit reviewed the case and reversed the district court's decision. The appellate court held that Rule 9(b) does not prohibit courts from considering allegations based on information obtained in discovery when deciding a motion to dismiss. The court emphasized that Rule 9(b)'s text does not restrict the source of information used to satisfy its requirements and that supplementing the rule with such a restriction would contravene the Supreme Court's guidance against adding pleading requirements on a case-by-case basis. The appellate court vacated the district court's order dismissing the complaint and remanded the case for further proceedings. View "Sedona Partners LLC v. Able Moving & Storage Inc." on Justia Law

Golden View Ready-Mix, LLC (Golden View) supplied concrete to Grangaard Construction, Inc. (Grangaard) for a bridge project. Golden View alleged that Grangaard failed to pay for the concrete, breached the implied obligation of good faith and fair dealing, and committed fraud. A jury found in favor of Golden View on the breach of contract and good faith claims, awarding damages and punitive damages, but found no liability for fraud. Grangaard appealed the punitive damages award and the decision to submit the fraud issue to the jury.The Circuit Court of the First Judicial Circuit, McCook County, South Dakota, presided over the case. Grangaard moved for partial summary judgment on the fraud claim, arguing there was no independent tort duty outside the contract. The court denied this motion, allowing the fraud claim to proceed. During the trial, the court permitted the jury to consider punitive damages based on the breach of the implied obligation of good faith, despite Grangaard's objections.The Supreme Court of the State of South Dakota reviewed the case. The court determined that punitive damages are only recoverable for breaches of obligations not arising from a contract, as per SDCL 21-3-2. The court found that the implied obligation of good faith arises from the contract itself and does not constitute an independent tort that could support punitive damages. Consequently, the court vacated the punitive damages award. However, the court affirmed the lower court's judgment in all other respects, concluding that the error regarding punitive damages did not affect the jury's decision on the breach of contract and good faith claims. View "Goldenview Ready-Mix, LLC v. Grangaard Construction, Inc." on Justia Law

The Nelson Estate claimed an interest in a coin shop and alleged conversion of its property. Dr. Earl Nelson had provided funds for the business, resulting in a 50% ownership interest, which was confirmed by William Tinkcom. After Dr. Nelson's death in 2013, Tinkcom continued to operate the business and assured Nelson's heirs of their 50% interest. Tinkcom died in 2022, and the business was sold to Eddie Welch without including the Nelson Estate in the final agreement. The Nelson Estate sued the Tinkcom Estate, Welch, and Mere Coin Company, LLC, for breach of contract, unjust enrichment, and other claims, including conversion of valuable coins and collectibles.The Circuit Court of the Second Judicial Circuit in Minnehaha County, South Dakota, granted the defendants' motion for judgment on the pleadings, concluding that the statute of limitations barred all claims. The Nelson Estate argued that the statute of limitations had not expired and that equitable estoppel or fraudulent concealment should prevent the statute of limitations defense.The Supreme Court of South Dakota reviewed the case and affirmed the circuit court's determination that the first six business interest claims accrued upon Dr. Nelson's death in 2013. However, the court reversed the dismissal of these claims because the circuit court did not address the Nelson Estate's defenses of equitable estoppel and fraudulent concealment. The court also reversed the dismissal of the tortious interference and civil conspiracy claims, as these claims arose from the 2022 sale of the business. Lastly, the court reversed the dismissal of the conversion claim, noting that the record did not establish when the conversion occurred or when the Nelson Estate became aware of it. The case was remanded for further proceedings. View "Nelson v. Tinkcom" on Justia Law

Lezah Roberts entered into a fixed-price contract with Advanced Building Design, a Maryland-based firm, to build a handicap-accessible addition to her home in the District of Columbia. The project, which began in 2017 and was expected to take six months, remained unfinished nearly two years later. The project went over budget due to price increases and change orders, and Advanced sought to recoup these overages from Roberts. After initially agreeing to cover some additional costs, Roberts eventually refused to pay further increases, leading Advanced to cease work on the project. Roberts then filed a complaint in the Superior Court of the District of Columbia, alleging breach of contract, fraudulent misrepresentation, breach of the implied covenant of good faith and fair dealing, and a claim under the D.C. Consumer Protection Procedures Act (CPPA) for unfair trade practices.The Superior Court granted Advanced’s motion to dismiss Roberts’s suit, citing a mandatory forum selection clause in the contract that designated Maryland as the exclusive forum for litigation. Roberts appealed, arguing that the forum selection clause was unenforceable because it conflicted with the CPPA and was unconscionable.The District of Columbia Court of Appeals reviewed the case and disagreed with Roberts on both counts. The court held that the CPPA does not preclude parties from selecting their preferred forum and that the forum selection clause did not contravene public policy or demonstrate procedural or substantive unconscionability. Consequently, the court affirmed the Superior Court’s dismissal of Roberts’s complaint. View "Roberts v. Advanced Building Design" on Justia Law

Bernard Perez, an ophthalmologist, entered into a disability insurance contract with MONY Life Insurance Company in 1988. After being diagnosed with throat cancer in 2011, Perez began receiving monthly disability benefits. MONY later suspected Perez of dishonesty in his disability claims and financial information, leading to the discontinuation of payments in February 2018. MONY sued Perez for unjust enrichment, and Perez counterclaimed for breach of contract.The Middle District of Florida held a nine-day trial where evidence showed Perez's deceitful conduct, including misrepresenting his ownership in his medical practice and overstating his physical ailments. The jury found in favor of MONY on the unjust enrichment claim, awarding $388,000, and rejected Perez's breach of contract counterclaim.The United States Court of Appeals for the Eleventh Circuit reviewed the case. The court held that under Florida law, an unjust enrichment claim cannot proceed when an express contract covers the same subject matter. Therefore, the district court erred in allowing the unjust enrichment claim to go to the jury. The Eleventh Circuit set aside the jury's verdict on this claim and directed the district court to vacate the judgment awarding MONY $448,930.06.Regarding Perez's breach of contract counterclaim, the Eleventh Circuit found that the district court erred in failing to interpret the ambiguous term "acceptable proof of loss" in the insurance contract. However, this error was deemed harmless because the evidence overwhelmingly showed Perez's dishonesty in his proofs of loss. Thus, the jury's verdict against Perez on his breach of contract counterclaim was affirmed. The court also affirmed the district court's evidentiary rulings and denial of sanctions. View "MONY Life Insurance Co. v. Perez" on Justia Law

The Vinales family leased a home at Randolph Air Force Base, managed by AETC II Privatized Housing, LLC, and other associated entities. They experienced issues with the home's condition, including mold and asbestos, which they claimed led to health problems and property damage. They sued the housing providers for breach of contract, fraud, and other claims, seeking damages and attorneys' fees.The United States District Court for the Western District of Texas granted summary judgment for the defendants on most claims, citing the federal enclave doctrine, which limits applicable law to federal law and pre-cession state law. The court dismissed the fraud claim for lack of evidence and denied the plaintiffs' motion for attorneys' fees. The breach of contract claim proceeded to trial, where the jury awarded the plaintiffs over $90,000 in damages. The magistrate judge denied the plaintiffs' motion for attorneys' fees and the defendants' motion for judgment as a matter of law.The United States Court of Appeals for the Fifth Circuit reviewed the case. The court affirmed the application of the federal enclave doctrine, which barred most of the plaintiffs' claims. It upheld the dismissal of the fraud claim, agreeing that the plaintiffs failed to identify actionable fraudulent statements. The court also affirmed the denial of attorneys' fees, finding no legal basis for the award. The exclusion of certain evidence at trial was deemed not to be an abuse of discretion. The court found sufficient evidence to support the jury's damages awards for personal property and diminution in rental value. Finally, the court held that the jury instructions were proper and did not create substantial doubt about the jury's guidance. The judgment of the magistrate judge was affirmed. View "Vinales v. AETC II Privatized Housing, LLC" on Justia Law

CPI Security Systems, Inc. filed a lawsuit against Vivint Smart Home, Inc., alleging that Vivint engaged in deceptive practices to lure away CPI’s customers. Vivint sales representatives falsely claimed that Vivint had acquired CPI, that CPI was going out of business, or that Vivint needed to upgrade CPI’s equipment. These tactics led many CPI customers to switch to Vivint, causing significant losses for CPI. A jury found Vivint liable for violating the Lanham Act, the North Carolina Unfair and Deceptive Trade Practices Act (UDTPA), and for committing the common-law torts of unfair competition and tortious interference with contracts. The jury awarded CPI $49.7 million in compensatory damages and $140 million in punitive damages.The United States District Court for the Western District of North Carolina upheld the jury’s verdict. Vivint appealed, raising several issues, including the requirement of CPI’s reliance on false statements for the UDTPA claim, the sufficiency of evidence supporting the damages award, the application of North Carolina’s cap on punitive damages, and the admission of prejudicial evidence.The United States Court of Appeals for the Fourth Circuit reviewed the case and found no reversible error. The court held that CPI was not required to prove its own reliance on Vivint’s false statements to establish a UDTPA claim, as the claim was based on unfair competition rather than fraud. The court also found that the evidence presented by CPI was sufficient to support the jury’s damages award. Additionally, the court ruled that the district court correctly applied North Carolina’s cap on punitive damages by considering the total compensatory damages awarded. The court further held that the district court did not abuse its discretion in denying Vivint’s motion to bifurcate the trial or in its evidentiary rulings. The reassignment of the trial judge post-trial did not warrant a new trial. Consequently, the Fourth Circuit affirmed the district court’s judgment. View "CPI Security Systems, Inc. v. Vivint Smart Home, Inc." on Justia Law

A property insurance dispute arose between a church in Albany, Georgia, and its insurer following storm damage in 2014. The church's property, which included asbestos tile roofs, was insured under an all-risks policy. After the storm, the insurer's adjuster estimated repair costs at $2,300, but the church's contractor estimated over $1.3 million for full roof replacement. The church sued for breach of contract and bad faith. In 2018, Hurricane Michael caused further damage, and the church filed a claim with a different insurer, obtaining a lower repair estimate. The original insurer argued that the church's failure to disclose this second claim constituted a material misrepresentation.The United States District Court for the Middle District of Georgia excluded evidence of the alleged misrepresentation, finding it irrelevant. The jury awarded the church $1.75 million in damages, and the insurer's motion for a new trial was denied. The insurer appealed, arguing that the exclusion of misrepresentation evidence was erroneous and that the damages award was speculative and contrary to the policy terms.The United States Court of Appeals for the Eleventh Circuit reviewed the case. It found that the insurer had waived its misrepresentation defense by not objecting during trial and by explicitly withdrawing the defense. The court also held that the jury's award, which included increased construction costs due to delays, was supported by sufficient evidence and did not constitute double recovery when combined with prejudgment interest. The court affirmed the district court's rulings and the jury's verdict. View "Central Baptist Church of Albany Georgia Inc v. Church Mutual Insurance Co." on Justia Law

A bank holding company sued two guarantors for breach of their personal guaranties on a $1.5 million loan extended to an entity they were involved with. The guarantors argued that the bank holding company lacked standing to sue because there was no written assignment of the loan documents from the original lender, a bank, to the holding company. The district court admitted the written assignment into evidence and found that the holding company had standing. The court also granted summary judgment in favor of the holding company, finding the guarantors liable under the terms of their guaranties.The guarantors had counterclaimed against the holding company and other parties, alleging fraudulent concealment, fraudulent misrepresentation, civil conspiracy, and breach of the implied covenant of good faith and fair dealing. They argued that the bank and its president conspired with a now-deceased individual to conceal the financial instability of the individual’s entities, which led to the guarantors entering into the guaranties. The district court found no genuine issue of material fact regarding these counterclaims and granted summary judgment for the holding company.The guarantors also attempted to file a document in which the personal representative of the deceased individual’s estate confessed judgment against the estate. The district court ruled this filing a nullity, as the personal representative’s appointment had been terminated before the filing, and he was not authorized to act on behalf of the estate.The Nebraska Supreme Court affirmed the district court’s rulings, holding that the holding company had standing, the guarantors were liable under the guaranties, and the counterclaims were unsupported by evidence. The court also upheld the ruling that the purported confession of judgment was a nullity. View "Henderson State Co. v. Garrelts" on Justia Law